Nobody said that the private sector never messes anything up. Of course, that happens all the time.

The issue is that government administered systems tend to be reformed much more slowly, because they aren't directly accountable to the people that use them, but rather the third party that writes the check: Congress. So, reform comes much more slowly, inefficiently and usually with all manner of political distortions.

Private sector systems are directly accountable to their customers, so reform of bad policies generally occurs at a much faster rate. Unless, that is, bad or outdated governmental regulation distorts the incentives of the market participants.

We already have a federally-run, single payer healthcare system: the Veterans Administration. I don't know anyone in their right mind who would want to double down on that bad system.

The U.S. just doesn't do big government well. When our A students go to Wall Street or Silicon Valley and the B and C students go into government, it's no shock to see how poorly our federal govt is run.

I believe that "mid" stage firms can thrive by developing their abilities to create combinations from failed startup technologies. This will require a more technology-focused/savvy VC, but great companies have been formed by the combination of existing technologies found in the trash heap of failure.

Crowdfunding/crowd investing/crowd capital is definitely a new and viable option for startup capital formation and VentureDeal has supported in.

My take is that it really won't disintermediate traditional VC very much. VCs are in the business of detecting and investing in the next huge, game-changing, disruptive company. Frequently, when really disruptive companies go out for initial investment, a typical investor, even many VCs, will scratch their head and fail to "get it", fail to understand how the company could possibly succeed. But the visionary VC is willing to make a bet on it.

A perfect example is Twitter. When it launched, the vast majority of the population, even techies, could not understand why they would care to know about what their friends had for lunch. So, in my opinion Twitter would not have been successfuly crowdfunded, since the typical crowdfund investor would not have been able to understand the business model or the utility and potential value proposition of it.

Ironically, Fred Wilson invested in Twitter at the very earliest stage. He is a perfect example of a VC who is capable of making a bet on something that other people don't understand.

I do think, however, that crowdfunding will be very good at funding "fast follower" type companies. These "me too" companies will be able to receive funding from a typical small crowdfund investor, because they will presumably have a reference point in which to make a judgment on writing that check.

I also believe that the ultimate question over time for crowdfunding portals will be about the supply of money - investment return performance that attracts repeat investors to the concept. Will any of the crowdfunding portals share their aggregate investment financial results? I'm not talking about how much money was raised by startups, but how much money was RETURNED TO INVESTORS.

Show me a crowdfunding portal that publicizes that its INVESTORS prosper and I'll show you a sustainable portal.

I would add that most startup founders/early CEOs are fairly limited in displaying the finer points of corporate communications. The informal nature of disruptive startups reinforces and contributes to this casual environment. Mistakes will be made, feelings a little bruised. If you can't stand the heat...

With Wall Street/big finance disgraced, media needs to create a new "hero" for the American zeitgeist.

It has all the elements - the hero's quest of building something from nothing, rags to riches success as a beacon for the masses, pursuing the "progress" of making the world a better place through technology - the futuristic promise of a better life.

It's so easy to start a consumer startup now: the friction that used to be there in terms of getting financing, launching online and having the initial resources is now much lower due to the wider availability of angel stage funding, metered cloud services, social media leverage and accelerators/incubators everywhere.

As a result, the space has received over-investment along with too much "me too" technology development.

But, this will probably result in a few of the smartest entrepreneurs combining pieces of these technologies with their own in order to create the next great innovation.

I'd be curious to learn whether SF empties out during the holidays (I suspect it does). With so many young people living there, it may see a net drop in souls within the city limits, as young folks leave town to visit family elsewhere.

As The Economist has highlighted recently, the critical issue is whether a developing nation "gets rich before it gets old". According to their statisticians, China will not do so, partially due to their 1-child policy. India is a great question mark as well, since their rigid, bureaucratic structures continue to thwart badly needed reforms.

However, the United States continues to enjoy a youthful influx of immigrants, and thus an ever-rejuvenating source of talent, creativity and wealth.

Western Europe is indeed graying and has the additional burden of the Euro zone financial problems to work out, when they should be focused on competing harder on the world stage. They are definitely at risk of being the major loser in the decades ahead.

Since the dot com boom of the late 90's, venture became an official "asset class" hard coded into the investment allocation matrix of LPs. Few of those LPs want to admit their error. They also hope that venture will return to trend - anything to help offset the dismal returns of their other portfolios.

Physical stores can succeed by offering something that a generic Wal-Mart cannot: a more memorable and unique "experience". You can't beat Wal-Mart or Amazon on price, selection or convenience, but you can beat them on making shopping something different.

The key ingredient you didn't emphasize is hiring "A" level management. A great manager can marshal resources to motivate, educate and enforce standards so that the team achieves more together than they would each operating individually.

Homo Sapiens no doubt successfully evolved in part due to our ability to adapt to new situations, opportunities, threats, etc. One of the most powerful attractive words is "New", simply because it triggers the idea of potential benefit or advancement.

We've been testing promoted account ads on Twitter and have been *very* pleased with the relevancy and quality of new followers. Twitter seems to be doing a pretty good job on their targeting algorithms...

When the world gives our government a virtually unlimited blank check for the past 40 years and our debt rises inexorably as we borrow in good years and bad, whether Republicans or Democrats are in power...

When the connection between corporate entity and individual has been virtually severed after repeated waves of mass firings during economic downturns...

When there is no vision of a higher national or personal calling other than "freedom"...

It's not surprising for impressionable people to envy and seek to emulate the rich, become rent seekers from government, lose any sense of loyalty to a cause or corpus other than themselves and feel "free" to obtain what they think they "deserve" by any means they deem necessary.

My sense is that you may see VCs open up "satellite" offices in the emerging markets, similar to what some have done in the past, such as New Enterprise Associates, Sequoia and others.

I also believe that the VC model is predicated on the VC being able to do two things efficiently: evaluate opportunities and manage investments. By doing those two things efficiently, VCs can still have a life outside of work. If Dave McClure is "always on an airplane", it doesn't sound like a sustainable model, from a personal standpoint, unless he considers airline check-in attendants his "family".

You know, the more things change, the more they stay the same. During the.com boom of the late 90s, all kinds of incubators sprang up. And then people (investors) figured out that coddling startups did not increase their chances for success, but rather warped and delayed the natural Darwinian selection process. Most of these incubators are simply option pools, an organized version of "spray and pray". But nothing substitutes for deep and specialized market knowledge to gain outsized returns.

I think the trend that you're describing is partially a function of the venture capital industry attracting "finance types" ( i.e. bankers) over the past 15 years. Prior to the big run-up of the first.com era of the late 1990s, my guess is that you didn't see very many non-technology types in institutional VC.

As a result of the big-money successes of the late 90s and the "asset classification" of venture capital by limited partners, the industry attracted a much greater proportion of "financial engineers" rather than technology-focused partners.

Hence, the general change over time to smaller bets and greater safety.

@Christopher Gu Christopher, I can envision that different types of companies may want to attract different sorts of investors.

As an example, there might be an enterprise software startup that doesn't have the same kind of incentives/rewards available and which wants to attract a different type of investor base.

My point is simply that one size will probably not fit all, and I imagine that different marketplaces will form and cater to different types of companies, with different value propositions and investor bases.

@Christopher Gu I think you raise a good point, in the sense that the crowdfunding markets that will emerge/succeed may do so with a variety of financial return models between investor and investee. Some types of companies may be able to accumulate the kind of investment they need and yet provide different forms of compensation to their investors.

The points you raise are entirely valid. As a past Angel investor involved with a high quality Angel group and more recently the founder of a venture capital database (VentureDeal), the chance for the "small investor" to make a significant return is about the same as winning big in Vegas. Truly Accredited investors should place their "bets" in small amounts, among a portfolio of companies.

While VentureDeal has absolutely no intention of becoming an "Intermediary" in the new crowdfunding world, we do hope to provide research services to those quality-oriented intermediaries that seek to arm their investor base with additional points of reference so they can be more informed than a simple Google search.

Aside from that, crowdfunding for technology companies will no doubt prove to have its "pros and cons" and over time, the data will show which types of companies and investors tend to succeed and which fail. It will be a learning process for all parties involved and hopefully the investors choosing to make their "bets", will start small and go slow.